Summits Yellow

Six facts shaping the programmatic world in 2017

Tim Maytom

The programmatic ecosystem is complex, and growing more complicated every day. With the wide variety of players involved and an ever more diverse set of offerings, it can be tricky to keep track of what's going on, and how you can maximise efficiency using this powerful technology.

Our Programmatic Lunch event next month will help you navigate the programmatic world by bringing together all its players, from publishers and ad exchanges to digital agencies and data management firms. By bringing together the entire chain, we're hoping to build understanding and tackle some of the big problems facing the industry. In the meantime, here are some essential facts that should help you grasp the programmatic world as it is today.

The chain consumes a lot of money
Current estimates suggest that up to 30 per cent of the overall programmatic ad budget is allocated towards technology, usually in the form of a variety of intermediary costs and operational fees. One only has to look at the latest Lumascape diagram to understand the number of DSPs, SSPs, DMPs, trading desks and tech vendors that sit inbetween the advertiser and the publisher.

These fees cover all the technology required to process decisions in real time, and the programmatic ecosystem wouldn't function without that tech, but it's only natural that publishers and advertisers are looking for high value and return on investment from the firms they work with.

The internet and video will soon be synonymous...
Programmatic formats are as diverse as traditionally sold ones, but firms involved in the ecosystem need to make sure they are keeping pace with the changing face of the internet and how content is being delivered to consumers.

Figures from Cisco estimate that by 2019, video will account for 80 per cent of global internet traffic. If you're not involved in programmatic video, time is running out to leap aboard or risk being left behind.

...but don't neglect other channels either
The growth and impact of video are impressive, but they are not the only channels being revolutionised by programmatic. Global's recent acquisition of AudioHQ created a digital audio ad platform with an audience of 160m worldwide, and with 60 per cent of Spotify's 100m users accessing their free, ad-supported model, the time to invest in programmatic audio has never been better.

Likewise, the growth of digital display and location-based targeting is bringing out-of-home advertising into the 21st century, with Clear Channel launching its first ever programmatic buying solution earlier this year and predicting that some key products and markets will be 100 per cent programmatic by the close of 2017.

Knowing your different programmatic types is crucial
It can be tricky to remember exactly what the difference is between formats like private marketplaces and automated guaranteed, but knowing exactly what you're trying to buy makes a huge impact when it comes to programmatic trading.

According to The Weather Company's Felix Zeng, a breakdown of the publisher's ad sales channels found that RTB marketplaces tended to achieve viewability rates of around 30 per cent, while private and curated meant 70 per cent, and automated guaranteed can get close to the 100 per cent mark.

Header bidding is transforming the programmatic world
Anyone even tangentially involved in programmatic won't be surprised by this point, as header bidding has been hailed as finally delivering on the promise of programmatic, driving up revenues for publishers while ensuring that advertisers reach the consumers they target.

However, the implications of moving to header bidding are still being worked out, and there are problems down the line that need to be addressed. For example, header bidding has increased the number of ad queries that DSPs have to deal with by around 1000 per cent over the course of three years, and that huge jump in traffic is putting significant strain on some systems.

Programmatic differs from region to region, but it's growing everywhere
One of the most important facts to remember is that programmatic isn't a monolith, it's just a different set of tools, and therefore the way that its used can vary widely from region to region and client to client. Understanding where a market is in terms of programmatic adoption is crucial when it comes to using it in the most efficient way.

Taking just the APAC region, Australia and New Zealand are relatively mature, with around 50 per cent of all digital ads traded programmatically and high adoption of private marketplaces. India is further behind, but it's fast catching up, with high levels of header bidding adoption, while in Japan programmatic tends to be driven by the demand side, as advertisers force publishers to adopt the technology.

These facts offer just a snapshot of the complex world of programmatic. If you're interested in learning more, and forging connections with peers across the entire programmatic ecosystem, sign up now for our Programmatic Lunch. Seats are going fast, and in order to ensure that the entire chain is represented, we're limiting tables to one representative from each discipline, so reserve your place now while you still can.

To join us for the Programmatic Lunch on Friday 24 November, click here to reserve tickets.